BEIJING (AFP) - China's Foreign Minister Wang Yi told top US diplomat John Kerry on Saturday that Beijing was "unshakeable" in its defence of sovereignty, as tensions between the powers mount over Chinese island-building in strategic but disputed waters.

The United States is weighing sending warships and surveillance aircraft within 12 nautical miles - the normal territorial zone around natural land - of artificial islands that Beijing is building in the South China Sea. Such a move could lead to a standoff on the high seas in an area home to vital global shipping lanes and believed to be rich in oil and gas deposits.

Beijing regards almost the whole of the South China Sea as its own and after talks in the Chinese capital, Wang said: "The determination of the Chinese side to safeguard our own sovereignty and territorial integrity is as firm as a rock and it is unshakeable."

"It is the request of our people on our government as well as a legitimate right of ours," he added sternly at their joint press conference.

Kerry was less assertive in public, saying Washington was "concerned about the pace and scope of China's land reclamation" and urged it "to take actions that will join with everyone to reduce tensions".

The region needed "smart diplomacy", he said, rather than "outposts and military strips".

Senior State Department officials had said ahead of the meeting that Kerry would take a tough line and "leave his Chinese interlocutors in absolutely no doubt that the United States remains committed to maintain freedom of navigation". "That's a principle that we are determined to uphold," the official added.

The world's top two economies have significant commercial ties and Chinese President Xi Jinping is due to pay a state visit to the United States in September.

But China's ambitions for a place on the world's political stage commensurate with its economic role have seen it cross the United States in multiple fields, and the two have long-running disputes over issues ranging from trade to cyberspying to human rights.

At the same time, the United States is China's second-biggest trading partner after the European Union, with two-way commerce worth US$555 billion (S$733 billion) last year, according to Chinese figures.

Beijing is the heavily indebted US government's biggest foreign creditor, figures from Washington showed on Friday, reclaiming top spot from Japan with more than US$1.26 trillion in Treasury bonds.

- 'Hegemonic presence' -

Beijing bases its territorial claims in the South China Sea on a segmented line dating back to Chinese maps of the 1940s. Pentagon officials last week revealed that it is building artificial islands on top of South China Sea coral reefs at an unprecedented pace, in a land reclamation effort dubbed a "great wall of sand" by one American commander.

The rapid construction comes to 800 ha, with 75 per cent of the total created in the last five months alone, and includes a runway said to be 3,100 metres long.

US officials increasingly believe Washington needs to send a clear signal about China's activities around the Spratly Islands and other disputed territories, while avoiding triggering a crisis.

They also stress that under the UN Convention on the Law of the Sea, only natural land masses create a territorial claim, not artificial islands. "You can't build sovereignty," an official said.

But the United States has never ratified the convention.

Beijing defends the island-building as taking place within its own territory and intended to enhance its ability to carry out international obligations such as search and rescue. In a commentary Saturday, China's official news agency Xinhua said the United States was guilty of "thinly veiled hypocrisy".

"The United States is not a party in the South China Sea disputes, which are between China and other claimants and should be handled by those directly involved," it said. "Washington has no valid grounds whatsoever to point an accusing finger at Beijing over South China Sea. Instead, it needs to look at itself in the mirror," it said.

It accused the United States of seeking "a pretext to maintain its hegemonic presence in the region".

The United States is in the process of a foreign policy "pivot" to Asia and Australian Prime Minister Tony Abbott on Friday denied that Washington planned to base B-1 bombers in his country, saying an American official had "misspoken" when he told the Senate the deployment was intended.